Beijing opened the door to international investors, and one domestic sector may be the big winner

China shocked the world last week when it suddenly announced it would finally make some moves to open up its financial sector to more ownership from international investors.

But it’s not just overseas companies that stand to benefit: One important Chinese sector will grow stronger, experts said.

Like many parts of China’s financial industry, insurance is under scrutiny by Beijing for firms’ outsized risk appetite, including the issuance of high-yield, short-term life insurance and other investment products. But those same insurers now stand to be the biggest beneficiary of the new investment rules.

That is, with the expectation of more competition and emphasis on best practices, the industry will likely see better products and standards, analysts said. In fact, the management in China should begin adopting better strategies for risk management — a persistent issue in the world second-largest economy.

“The Chinese insurance sector’s risk management remains in the developing stage, and thus would benefit from a greater influx of overseas practices and professional personnel,” said Eunice Tan, an analyst at Standard & Poor’s Global Ratings.

“We expect the increased foreign-insurer participation will promote the development of more sophisticated products with higher margins and more recurring premiums such as pensions, retirement planning and healthcare insurance, areas undeserved by domestic insurers,” said Moody’s Investors Service in a note this week.

Chinese authorities have been sounding warnings and taking decisive steps to crack down on excessive risks in the financial system this year.

Just on Thursday, a senior official at the China Insurance Regulatory Commission said the country will tighten regulations on the use of insurance funds to curb “financial chaos,” Reuters reported.

In July, a senior Chinese insurance regulator warned of multiple risks in the industry, including liquidity, state news agency Xinhua reported. And a month earlier, authorities detained the chairman of insurer Anbang — best known for its 2015 purchase of New York’s landmark Waldorf Astoria hotel — in what industry experts called a “house-cleaning” of those associated with high-yield insurance products.